VolkswagenGreen-wash Detector Research Report1.0 IntroductionIntensive competition across localand international markets has forced firms to invest intensively into themarketing of their goods and services. This is a proven way of creating acompetitive advantage as such promotions and advertising campaigns tend toappeal and attract more customers. Besides, it differentiates firms fromrivals, while enabling them to conform to growing societal expectations onenvironmental management and social responsiveness. Bazillier and Julien, (9)note that with the introduction of the corporate social responsibility (CSR)concept, firms have quickly adopted it in an attempt to increase their appealto customers who reward socially responsible firms. In return, firms haveventured into green-washing practices in an attempt to lure customers to buyand use their products.
Bazillier and Julien, (10) define green-washing as apractice of making a misleading or unsubstantiated claim about environmentaland social benefits of a service, product, company practices or technology. As a result, the firm or industrycould appear environmental conscious, when in reality its activities have adverseimpacts on the environment. It is upon this basis that this green-wash detectorresearch report critically analyzes green-washing activities in the automobilemanufacture industry and in particular, the Volkswagen diesel-gate scandal. 2.0 Accuracy of Social Responsibility Claim made byAutomobile Companies/ IndustryThe automobile industry hasconsistently been under pressure to conform to changes in environmentalregulation on fuel economy, and potentially, reduce the environmental impact ofcars (Amatulli, Michele, Matteo & Gianluigi, 139).
These pressures emanateboth from the micro and macro environment. For instance, with the increasingproduction of cars, it is prudent that manufacturers all over the world monitorthe amount of fuel consumption by reducing dependence on oil which is anon-renewable source of energy but also high in carbon. There are alsostringent government regulations and other benefits such as lenient taxationfor auto firms those manufacturers’ efficient vehicles (Amatulli et al., 153).Another factor is that because of the increased awareness of the need toconserve the environment. Consumers are changing their behavior in favor ofenvironmental conscious automobile manufacturers. Through this struggle,manufacturers are conducting research and development aimed at increasing fuelefficiency of their cars.
For instance, Nissan, a Japaneseauto manufacturer introduced a new feature, known as Nissan Leaf which isadvertised as increasing the fuel efficiency of their Nissan brands. Nissancreated a complementary advert to market this new product. In the commercial,it depicted a scene of melting polar ice caps. This led to the movement ofpolar bears from their natural habitats towards the cities. As it approachesthe city, it is increasingly upset by the pollution arising from modes oftransport. The bear arrives in a suburban area where it finds a man about todrive off in a Nissan Leaf and gives him a bear hug.
From the face value, thisadvertisement speaks volumes to potential consumers on the fuel efficiency andenvironmental consciousness of the product. The commercial also highlights thecurrent focus on greening and reduction of global warming, which has become aconventional practice among automobile manufacturers. Customers watching these advertsare often convinced and equally enticed into associating with products thatpromise to preserve natural habitats of animals and safeguard the environmentfor posterity. This is the reason why such adverts often attract high sales volumefor auto manufacturers. A critical analysis of this advert shows that NissanLeaf, just like most car brands purporting to be environmentally friendly has alot of shortcomings. For instance, Nissan Leaf is only convenient and practicalfor short distance travels and around cities because of its limited batterycapacity which can support a charge for 100 miles or between 8 and 10 hours onfull charge. Another issue is that current infrastructure to support chargingof these cars is limited.
This leads to the question on the contribution of aNissan Leaf to reducing global warming. The reality is that electricity used tocharge the car is derived from natural gas and coal which are contributors toclimate change. The accurate part is that electricand hybrid cars reduce amounts of carbon emissions but they do not completelyconform to the envisioned future narrated through the adverts.
Another point ofcontention is that automobile manufacturers use rubber, chemicals, naturalminerals and other raw materials that pollute the environment indirectly anddirectly (Smit & Elizabeth, 49). This implies that manufacturing and usingany car contributes towards environmental pollution and degradation. The wholetransport industry has been blamed for its environmental impact and forced toconsider alternative approaches that create positive climate change. One of thefocus has been directed towards the production of cars that consume less fueland emit lesser CO2. As a part of conforming to these demands, and appearculturally aware as well as environmentally conscious, Ford Motors Company has founditself in green-washing scandals following its advertisement of 2007 FordEscape Hybrid, 2015 Lincoln MKZ Hybrid (The Green Market Oracle, para 4).
Thisis associated with complete deceit and misleading of customers regarding theenvironmental benefits of a car. BMW hybrid X6 also found itself in agreen-washing claim but was challenged at the Frankfurt Motor Show (Budinsky, 209).Another case that forms takes the center stage for this research report is thelatest case of green-washing by Volkswagen. 3.0 Systematic Research to Determine Extent ofMisrepresentation of Situation in VW Green-washAccording to Earth Day 2016 report,Volkswagen took the first position for green-washing practices followed byRainforest Alliance, Natural American Spirit Cigarettes, AJM PackagingCorporation, Lei Electronics carbon neutral batteries and SeaWorld killer whaleshows. This practice has been deeply rooted in the belief that consumers arewilling to pay more for firms that produce sustainable, environmentallyfriendly, good for the community and good for the society cars. According to Smitand Elizabeth, (50) there is nothing clean about using diesel and diesel engines.These engines cause pollutions beyond legal limits.
This is evident with themultiple class-action lawsuits against most automotive manufacturers.Mercedes-Benz was charged for its BlueTEC vehicles marketing campaign promotingthem as earth friendly and clean diesel. In reality, they released nitrogenoxides 65 times higher than legal limits allowed by Environmental Protection Agency(EPA). This was followed by Volkswagensadmission that it had been involved in engineering deception after its engineersinstalled a cheat device (Ewing, para 1; Lane, 33). This is an illegal softwarethat was installed in VW diesel engines to avoid being detected for high levelsof nitrogen oxide emission. The scandal ensued in September 2015.
This wasafter the firm had sold more than 11 million of this brand. It is believed thatVW began making plans to deceive its customers in 2006 as it wanted to enterand increase its market shares in the USA against Toyota. However, itsengineers were unable to produce small engine cars that met American emissionstandards.
At a meeting in Wolfsburg, VW executives agreed to install a cheatdevice on the engines (Siano, Agostino, Francesca & Sara, 27). It beganaggressive marketing in 2008 purporting to be a clean diesel engine. In 2013,West Virginia University conducted laboratory tests which showed that roadtests of VW emitted more poisonous levels of nitrogen oxides than laboratorytests. A follow up was made, and the information becomes public. VW was forced to recall affectedcars in the USA. The public made an outcry on the case of green-washing whichled to the collapse of stock prices, revenue and net income.
The CEO resignedand the firm charged $14.7 billion for settlement. The firm acknowledgedcharges for conspiring to violate a Clean Air Act and defraud the US government(Ewing, para 4). The result is that VW failed to justify its commitment toproducing environmentally friendly products that are good for society and goodfor the community.
This research, as justified by the seriousness of the lawsuitsand impact on the company, points at a massive misrepresentation of thesituation. 4.0 ConclusionSecondary research on VWdiesel-gate scandal highlights a case of green-washing in the automobileindustry. The report also justifies other cases of green-washing where firmssuch as Ford and Nissan are involved in varying degrees of greenwash.
WhereasVolkwagens represents the biggest form of deceit, Nissan Leaf’s advertisementsare misleading to a certain extent, but it is much better than the installationof a cheat device to manipulate carbon emission test results. These caseshighlight the difficulty of achieving perfect ethical standards across mostindustries thus bringing to question the concept of corporate socialresponsibility and its contribution to green-washing.